Chapter 1 - Accounting Elements

Question 1

Asset

Answer 1

a present economic resource controlled by an entity as a result of past events

Question 2

Liability

Answer 2

a present obligation of an entity to transfer an economic resource as a result of past events

Question 3

Owner’s Equity

Answer 3

the residual interest in the assets of an entity after the deduction of its liabilities

Question 4

Revenues

Answer 4

Increase in assets or decreases in liabilities that result in increases in owner’s equity, other than those relating to contributions from the owner

Question 5

Expenses

Answer 5

decreases in assets or increases in liabilities that result in decreases in owner’s equity, other than those relating to distributions to the owner